The jewelry sector is poised to grow faster than the overall luxury market, as it attracts a “younger and more diverse client base” that increasingly seeks branded jewelry, according to a new report on “The State of Fashion Luxury.”
The report’s authors, consultants McKinsey & Company and publication Business of Fashion, predicted the jewelry market will grow 4% to 6% in the next two years, making it among the “most resilient” luxury categories (along with leather goods).
Growth in the jewelry sector will be fueled by “rising demand from ultra-high spenders and continuous investment from luxury houses in technology and expertise,” the report said. But it warned that considerable uncertainty remains regarding how lab-grown diamonds will affect the natural gem market and if engagements will rebound post-pandemic.
The study authors don’t see the overall luxury market maintaining the average 5% growth it had from 2019 to 2023—never mind the eye-popping 9% increases it enjoyed from 2021 to 2023. They noted that most of those gains stemmed from higher prices, rather than an increase in volume, as well as the strength of business in China.But now the Chinese economy has slowed down considerably, and consumers have become wary of constant price hikes.
It advised luxury brands to redouble their commitment to quality and craftsmanship, while recruiting new talent and developing new ways to communicate with customers. They also must take care to get the basics right: One-third of aspirational customers surveyed felt the in-store experience has gotten worseThe report concluded that the industry must use the current “slowdown as an opportunity to reflect and recalibrate.”
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